Elder Fraud Dupes Seniors Out of Billions — Why They’re Targets and the Most Common Scams
Defrauding seniors has long been a favorite pastime of scammers — especially during the holiday season — but it has really picked up steam in recent years. Elder fraud losses have increased nearly five-fold since 2017, according to data from the FBI, and rose by roughly three-quarters last year alone.
The FBI’s elder fraud report, released earlier this year, found that in 2021, more than 92,000 victims over the age of 60 reported losses of $1.7 billion to the Internet Crime Complaint Center (IC3). The dollar figure, the most recent available, represented a 74% increase from the previous year.
A recent analysis of the data conducted by The Motley Fool uncovered these other key findings:
- Elder fraud losses increased by 391.9% from 2017 to 2021 ($343 million to $1.685 billion).
- The costliest type of scam involving seniors was confidence fraud (including romance scams), with $432 million in total losses in 2021.
- Business email/email account fraud ranked next at $356 million, followed by investment fraud at $239 million.
- Tech support scams resulted in 13,900 victims, more than any other type of elder fraud.
Scams involving elderly people come in many different forms, from creating fake identities to build close relationships with unwitting victims to posing as grandchildren to bilk seniors out of money. Many seniors are also the victims of Ponzi schemes, inheritance fraud and fake lotteries in which victims are told to provide financial information in exchange for winnings or windfalls that don’t exist.
The first step to preventing elder fraud is recognizing the warning signs — not only on the part of seniors, but their family members as well, according to Matthew Frankel, a CFP and contributing analyst at The Motley Fool.
“Abrupt and unexplained changes in a will, authorized users on a bank account, or unusual money transfers are a few things to watch for,” Frankel told GOBankingRates in an email. “Older relatives that seem to be in financial trouble despite having sufficient retirement income can also be worth watching.”
He also advised that seniors and their family keep an eye out for unfamiliar names that have been added to financial accounts, such as getting mail from your bank addressed to a name you don’t recognize.
“So-called ‘grandparent’ schemes have become more common, and the sudden appearance of relatives you haven’t seen in a while can be a red flag,” Frankel said.
To avoid online scams, the HelpGuide.org website offers the following tips:
- Don’t click on suspicious or unfamiliar links or attachments in emails or text messages.
- Keep your security software updated.
- Never wire money to someone you haven’t met, even after building a rapport online.
- Be wary of online acquaintances who are quick to profess their love or ask you to keep the relationship a secret.
- Check domain names closely because scammers might use website names that are slightly different from genuine sites.
- Keep in mind that the IRS and other government agencies won’t initiate contact with you by email, social media, or text.
- Keep your social media accounts private so only friends can see your information. If your accounts are public, avoid posting personal information.
- If you get an online message from a business, call their official number to confirm if the message is real.
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Avoiding phone scams mainly means double-checking to ensure the callers are who they say you are. If someone claims to be a family member, check with other relatives you already know and trust to confirm the identity. Never make payments over the phone unless you have thoroughly vetted that the bill is genuine.
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